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SA banks may buy troubled Nigerian banks

  1. Posted on Wednesday 20 January 2010 - 09:59
    pejomo
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    Two South African banks have publicly disclosed their interest to purchase banks rescued by Nigeria’s central bank last year.

    Standard Bank South Africa and FirstRand, along with Nigeria’s First Bank, Skye Bank and Fidelity Bank, have shown interest in buying rescued banks after Nigeria’s regulator said the banks would need to find private investors to recapitalise them or, preferably, purchase them outright.

    Nigeria’s central bank injected about 600-billion naira (¤2.8-billion) into nine troubled banks since August after it found that they were too weakly capitalised to sustain operations because of a pile of bad debt. The regulator has indicated that bad loans could total 1.14-trillion naira (¤5.35-billion).

    In August last year, the central bank pumped 400-billion naira into Afribank, Finbank, Intercontinental Bank, Oceanic Bank and Union Bank to keep the banks afloat. The five banks supply about 40 percent of Nigeria’s total bank credit.

    At the same time, the central bank fired top management at the four banks and allegations of mismanagement and corruption have since surfaced.

    Two month later the central bank helped Bank PHB, Equitorial Trust Bank, Spring Bank and Wema Bank to the tune of 200 billion naira.

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